Posts tagged ‘real-estate’

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25/02/2014

Property remains top wealth driver in China-Hurun list | Reuters

Real estate remained the most lucrative road to riches in China last year, according to the Hurun Global Rich List, despite Beijing’s repeated efforts to cool red-hot property prices.

A labourer works at a construction site in Beijing, January 20, 2014. REUTERS/Kim Kyung-Hoon

Six of world’s 10 top real estate tycoons are now from China and Hong Kong, according to Hurun Report Inc, which released its Global Rich list on Tuesday.

Hong Kong property tycoon Li Kai-shing claimed the top spot in the Greater China area with his fortune rising 3 percent to 200 billion yuan ($32.80 billion).

Wang Jianlin, chairman of China’s largest commercial property developer, Dalian Wanda Group, and Lui Che-Woo, founder of casino operator, Galaxy Entertainment Group Ltd (0027.HK), were the runners-up with personal wealth of 150 billion yuan ($24.60 billion) each.

Wang’s fortune doubled last year, while Lui’s wealth jumped 108 percent, the report said.

Wang bought UK luxury yacht maker Sunseeker for $1.6 billion and is planning billion-dollar luxury hotel developments in London and New York.

Home prices in many Chinese cities continued to set records last year despite a four-year government campaign to cool the housing market, official data showed.

via Property remains top wealth driver in China-Hurun list | Reuters.

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22/01/2014

China’s Real-Estate Investment Boom Set to Continue in 2014 – China Real Time Report – WSJ

Chinese real-estate investors made a name for themselves abroad in 2013, picking up big-ticket projects from New York to London, and that momentum is poised to pick up this year.

“In the late 1980s, we noticed every second deal was done by the Japanese, and in the 1990s, it was investors from the Middle East,” said Alastair Hughes, chief executive officer of Asia Pacific at property consultancy Jones Lang LaSalleJLL +1.99%. “We’re seeing the beginning of such a wave in China.”

Chinese outbound commercial real-estate investment is estimated to exceed $10 billion this year, after it doubled to $7.6 billion last year from 2012’s $3.3 billion, according to data from Jones Lang LaSalle. Rival brokerage Colliers International is more bullish, saying it expects Chinese investors to spend at least twice as much on overseas property assets this year as last year.

“Chinese investors are very active in every major market in the world, and part of that has to do with government policy on overseas investment becoming less restrictive,” Mr. Hughes said.

Aside from the stronger yuan, which makes purchases abroad cheaper, Chinese investors also are heeding the old adage don’t put all your eggs in one basket.

via China’s Real-Estate Investment Boom Set to Continue in 2014 – China Real Time Report – WSJ.

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09/11/2013

Big Money Behind Chinese Soccer Strategy – China Real Time Report – WSJ

If money can buy success in the world of sport, then in China, it matters greatly to whom it belongs.

As China stands on the cusp of its first taste of international soccer success, with Guangzhou Evergrande taking on FC Seoul in the final of the Asian Champions League on Saturday night, it’s clear that without huge sums of money, this may never have been possible. And not just any money, but real estate money.

As preparations took place outside Tianhe Stadium in Guangzhou’s business district on Saturday morning, the clout and wealth of the local team’s owner, Evergrande Real Estate Group, was plain to see. Rows of trucks bearing the name “Evergrande Music” lined up outside the stadium in preparation for huge post-match bash. With a two-goal advantage after a 2-2 draw in Seoul last month (away goals count for more), Evergrande are the favorites to win Saturday night’s match.

Guangzhou-based Evergrande is owned by Xu Jiayin, who according to the latest Hurun Report rich list has a net worth of $7.7 billion. He also has political clout, as a member of the country’s top advisory body, the Chinese People’s Political Consultative Conference.

He bought the disgraced Guangzhou Pharmaceutical club in 2010 for 100 million yuan ($16.4 million), after the team was relegated over a match-fixing scandal dating back to 2006. After that, he signed China’s national team captain Zheng Zhi, as well as three players from South America.

“There will be no chance for a state-owned company to compete against private real estate money,” said sports columnist Yan Qiang.

China’s real estate developers may not necessarily be the biggest or most profitable companies in the country, especially compared to state-owned behemoths. But the industry is a source of some of the more colorful and freewheeling businesspeople — a number of whom are willing to take risks on sports teams for the prestige they bring.

In the 2013 Chinese Super League season, state-backed Shandong Luneng Taishan placed second but lagged far behind Evergrande in points. Beijing Guoan, backed by state-owned conglomerate Citic Group, placed third. Real estate money came into play for Guizhou Renhe which ranked fourth. The team received large sums of money from developer Renhe Commercial Holdings Co. Ltd. in 2010, after the team, which was then based in Shaanxi province, flirted with relegation to the second division.

Other teams in the Super League propped up by real estate interests include Guangzhou R&F, which finished 6th this year and Hangzhou Greentown, which finished 12th.

via Big Money Behind Chinese Soccer Strategy – China Real Time Report – WSJ.

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13/07/2013

Women and the property market: Married to the mortgage

The Economist: “CHINA’s communists attacked many bourgeois institutions after taking power in 1949. But marriage was not one of them. On the contrary, they enacted a marriage law in 1950, four years before they introduced a constitution. The pressure to marry remains heavy in today’s China, where almost 80% of adults have tied the knot at some point, compared with only 68% in America. But today, in contrast to the 1950s, marriage is bound up with another bourgeois institution: property.

In China mortgages often precede marriages. According to popular belief, if a man and his family cannot buy property he will struggle to find a bride. In choosing a husband, three-quarters of women consider his ability to provide a home, according to a recent survey of young people in China’s coastal cities by Horizon China, a Beijing-based market-research firm. Even if a woman herself dismisses this criterion, her family and friends, not to mention the country’s estate agents, will not let her forget it.

“Naked marriages”, as property-less ones are known, are endorsed by increasing numbers of young people. But as they get older, their attitudes may regress faster than society’s progress. One 28-year-old Beijing woman married her husband after falling in love with him at college. But “if you introduced a man to me now, and he couldn’t afford a home, I wouldn’t marry him,” she says. “I need to be more realistic. I’m not a 20-year-old girl.”

Some economists argue that competition for brides in China’s marriage “market” helps explain the punishingly high prices in its property market. Houses are least affordable in those parts of China where men most outnumber women, argue Shang-jin Wei of Columbia University, Xiaobo Zhang of the International Food Policy Research Institute and Yin Liu of Tsinghua University (see chart).

 

via Women and the property market: Married to the mortgage | The Economist.

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10/07/2013

The Risky Business of Retirement in China

BusinessWeek: “It’s not surprising that China’s roller-coaster stock markets have earned scant investor confidence. On Tuesday, the respected Beijing financial magazine Caijing reported on a survey of 9,282 investors in Chinese stock markets. Over the lifetime of their investments, just 16 percent had seen net earnings of more than 10 percent; 70 percent had seen losses of more than 10 percent.

An investor watches the electronic board at a stock exchange hall on June 24, 2013 in Huaibei, China

The performance of the Shanghai Stock Exchange and Shenzhen Stock Exchange often seems bizarrely detached from national economic performance. Since the beginning of the year, the Shanghai Shenzhen 300 Index—an index of leading stocks on the two exchanges—is down 11.3 percent. Even the famed British money manager Anthony Bolton lost money when he came to China. Bolton, who managed Fidelity International Special Situations Fund for nearly three decades with a stunning average annual return of 19.5 percent, launched the investment trust Fidelity China Special Situations in 2010. Three years later, that fund is down 15 percent, and Bolton plans to step down next year.

The volatile performance of China’s stock markets gives pause to investors of all stripes, but it also unfortunately intersects with another worrying trend in China: the graying of the population. China today is home to 180 million people over age 60. That figure is expected to double to 360 million by 2030. According to Wang Feng, director of the Brookings-Tsinghua Center in Beijing, by 2030, at least one in five people in China will be over age 65. How can they prudently invest for retirement?

The average life expectancy in China is now 73 for men and 79 for women, up more than 12 years since 1970, thanks to improved health care and nutrition. But the mandatory retirement age for most workers in China is fairly low: 50 for women and 60 for men. As a comprehensive report by the Prudential Foundation and the Center for Strategic & International Studies, China’s Long March to Retirement Reform, put it, “older workers seem to have little place in China’s new economic order.” The report also found that as of 2007, only 65 percent of the urban workforce, including both civil servants and private-sector employees, was contributing to even a basic state-mandated pension plan.

For the past half decade, real estate has been the preferred investment vehicle in China. Only two decades old, China’s private real estate market has never yet seen a downturn. Home prices in many leading cities, however, have risen so quickly that many nonwealthy Chinese are struggling today to enter the market and buy their first homes, even with the help of parents’ and extended family’s savings. (To be sure, many analysts and even Chinese megadeveloper Vanke’s chairman, Wang Shi, say the country’s heated real estate market risks becoming a bubble: “If the bubble lasted, it will be dangerous,” Wang told a recent conference in Shanghai.)”

via The Risky Business of Retirement in China – Businessweek.

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10/04/2013

* Lloyd’s building sold to Ping An

Insurance Times: “The Lloyd’s building will be sold to Chinese insurance firm Ping An for about £260m.

Lloyd's building

There is no sign that the Lloyd’s market would need to leave the building.

Commerz Real was the firm appointed to selll the building, helped by CBRE and Savills, according to The Times.”

via Lloyd’s building sold to Ping An | Latest News | Insurance Times.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

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10/04/2013

* Fitch Lowers Rating on China Local-Currency Debt

WSJ: “Fitch Ratings Inc. lowered one of its key ratings on China’s government debt, in one of the most prominent warnings to date over a credit buildup in the world’s second-largest economy.

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The downgrade applies only to China’s yuan-denominated debt, which is primarily traded domestically—not the foreign-currency debt that it issues in international financial markets, so it is unlikely to have a big impact on global financial markets.

Nevertheless, it is the first outright downgrade in years of debt that is widely seen as buffered by China’s vast foreign-exchange reserves, highlighting a growing perception that massive lending by China’s banks, as well as shadowy nonbank lenders that operate under little regulation, could seriously disrupt China’s economic recovery.

Much of China’s debt came from a surge of lending in the wake of the 2008 global financial crisis, which helped Chinese growth rebound in part with the help of massive infrastructure projects but weighed down local governments and banks with loans. Analysts at Fitch have been part of a chorus of analysts and market players consistently sounding alarms about the run-up in China’s debt.

Saying that “risks over China’s financial stability have grown,” the credit-ratings firm lowered China’s long-term local-currency rating to single-A-plus from double-A-minus, with a stable outlook. It was its first downgrade of Chinese debt since at least 1997. It kept China’s foreign-currency debt rating unchanged at single-A-plus, saying it is well supported by China’s foreign-exchange reserves, worth $3.387 trillion at the end of 2012.

Bank credit extended to the private sector was equivalent to 135.7% of China’s gross domestic product at the end of 2012, the highest level of any emerging-market economy rated by Fitch, it said.”

via Fitch Lowers Rating on China Local-Currency Debt – WSJ.com.

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09/03/2013

* Some Chinese Seek a Divorce to Avoid Real Estate Tax

NYT: “When the Chinese government announced new curbs on property prices this month, homeowners bombarded social networking sites with complaints. They formed long lines at property bureaus to register to sell their homes before the restrictions went into effect.

And some couples went even further: they filed for divorce.

Divorce filings shot up here and in other big cities across China this past week after rumors spread that one way to avoid the new 20 percent tax on profits from housing sales was to separate from a spouse, at least on paper.

The surge in divorce filings is the latest indication of how volatile an issue real estate has become in China in the past decade and how resistant people are to additional taxes.

Worried that housing prices are spiraling out of control and threatening social stability, the central government regularly rolls out measures aimed at damping demand and weeding out speculators.

Then home buyers, sellers, property developers and even local governments — which are typically heavily dependent on land sales for income — try to find ways to get around the restrictions.

“They always do this,” said Du Jinsong, a property analyst in Hong Kong for Credit Suisse. “When they implement new measures, people are always trying to circumvent the rules.”

China’s housing market has been one of the prime engines of economic growth in the past decade, and recently a sharp upturn in prices has reignited fears about inequality and a housing bubble.

On March 1, just days before the opening of China’s annual legislative session, the powerful State Council, which is led by Prime Minister Wen Jiabao, announced a series of new property measures that analysts say unsettled the housing market.

In its statement, the State Council, or cabinet, said that local governments should strictly enforce an earlier rule that ordered people selling a secondary home to pay a 20 percent tax on the profit.

Almost immediately, housing administration bureaus and real estate trading centers in big cities were flooded with people hoping to sell their apartments before the restrictions took effect. (Most local governments have not yet announced a deadline.)”

via Some Chinese Seek a Divorce to Avoid Real Estate Tax – NYTimes.com.

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22/01/2013

* Asian Buyers Snap Up Half of New London Homes

WSJ: “If you’ve just moved into a newly built apartment in central London, don’t be perplexed if your neighbors speak mostly Chinese.

Market-cooling measures in Asia have helped fuel interest in London’s real estate market—long a popular destination for property buyers on the prowl, says property consultancy Knight Frank. Last year, overseas buyers spent $3.5 billion on apartments undergoing construction in central London, up 22% from the year earlier.

Together, buyers from Singapore and Hong Kong snapped up nearly 40% of all such apartments in central London. Adding in buyers from Malaysia and mainland China, Asian buyers accounted for roughly half of all purchases. By comparison, U.K. buyers made up just 27% of all purchases of apartments under construction, according to Knight Frank’s latest figures. Such figures were generally consistent with those seen in 2011.

Among overseas buyers, more than two-thirds bought for investment purposes, says Knight Frank, while another third said they were motivated to buy for a child enrolled at a local university.”

via Asian Buyers Snap Up Half of New London Homes – China Real Time Report – WSJ.

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03/09/2012

* China’s steel traders expose banks’ bad debts

Reuters: “China’s banks are coming after the country’s steel traders, hauling executives into court to chase down loans that some traders said they didn’t initially need and can’t now repay.

An employee checks on a steel product at a steel production factory in Wuhan, Hubei province in this August 2, 2012 file photo. China's banks are coming after the country's steel traders, hauling executives into court to chase down loans that some traders said they didn't initially need and can't now repay. The heavy push to recover the loans is another sign of strain on China's financial system at a time when the country's leaders are contemplating another round of stimulus to boost the economy, and when banks are worried about bad debts piling up. REUTERS-Stringer-Files

The heavy push to recover the loans is another sign of strain on China’s financial system at a time when the country’s leaders are contemplating another round of stimulus to boost the economy, and when banks are worried about bad debts piling up.

The battle between the banks and steel traders also exposes flaws in the 4 trillion ($629 billion) stimulus round in 2008, and offers a warning to those calling for pumping more money into the system. At that time, Chinese banks threw money at the steel trade – a crucial cog in supplying the country’s massive construction and infrastructure growth.

But those steel loans, after offering a quick fix, became excessive, poorly managed, or a combination of the two. Government officials insisted more money was needed to prop up the industry. Steel executives said the money flow was too heavy, and they had to put the money to work in real estate and the stock market.

“After the financial crisis, when the government released its stimulus, banks begged us to borrow money we didn’t need,” Li Huanhan, the owner of Shanghai Shunze Steel Trading, told a judge at a recent hearing. “We had nothing to do with the money, so we turned to other investments, like real estate.””

via Insight: China’s steel traders expose banks’ bad debts | Reuters.

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